The Bank of Thailand (BoT) has called on banks operating in the country not to directly get involved in trading cryptocurrencies citing significant risks from the sector’s price volatility.
According to the BoT’s senior director Chayawadee Chai-Anant, banks cannot fully cushion customers due to risks involved in the crypto sector Bangkok Post reports.
“We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public, and there is a risk. If a company is a shareholder, that is another issue,” said Chai-Anant.
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The regulator’s warning comes as more citizens get involved in cryptocurrencies, with banks initiating significant investments in various digital currency businesses. For instance, in November alone, the country’s Securities Exchange Commission indicates that crypto transactions amounted to 205 million baht ($6 million).
At the same time, Thailand’s Siam Commercial Bank Plc (SCB) announced the acquisition of Bitkub cryptocurrency exchange while the Bank of Ayudhya invested in the Zipmex exchange.
Warning against accepting crypto payments
Recently, BoT has raised concerns about the growing cryptocurrency sector, with the latest advisory warning companies against accepting digital currency payments.
The bank argued that accepting crypto payments will likely affect the institution’s ability to manage the economy. Officials from the institution singled out cryptocurrencies that lack clear asset backing.
Although Thailand’s crypto regulations remain unclear, BoT has confirmed working with other agencies to regulate the crypto space. Recently, the Securities and Exchange Commission (SEC) drafted new rules for the custody of digital assets to strengthen investor protections.
The regulations released in August are seeking to bar crypto custodians from extracting benefits from their clients’ assets.
The new rules suggest that crypto custodians should close clients’ accounts every business day to ensure the assets are accounted for and not used for someone else’s benefit.
Thailand’s intention to strictly regulate crypto exchanges emerged after filing a criminal complaint against Binance. According to authorities, Binance was operating in the country illegally without a valid license.
